The parent firm of the well-known application Snapchat, Snap Inc., has revealed intentions to lay off almost 20% of its more than 6,400 employees worldwide.
More than 1,200 employees at the software company will be affected by the news, which comes as broader economic conditions have deteriorated recently due to growing inflation and interest rate hikes by the Federal Reserve. The tech industry has been particularly hard hit by the recent market slump, with stories of hiring freezes, layoffs, and other cost-cutting measures dominating headlines for months.
In a statement, Snap CEO Evan Spiegel revealed intentions of firm restructuring to concentrate on “three strategic priorities: community growth, revenue growth, and augmented reality.”
Since the year began, Snap stock has fallen by more than 75%. Snap’s stock suffered a severe decline last month when the business revealed poor sales growth and informed investors that the economy had deteriorated more quickly than anticipated.
In a memo to staff, Speilberg said, “In the United States, we will provide at least four months of compensation replacement, as well as financial assistance to enroll in COBRA, so that team members will have until the end of the year to find new opportunities while still receiving compensation and health benefits from Snap.”